AUTOMOTIVE MULTIMEDIA AND COMMUNICATIONS

Detailed system and semiconductor demand analysis for in-vehicle infotainment, telematics and vehicle-device connectivity features.

May 9, 2014 14:34 rlanctot

It wasn’t supposed to be this way.  Ride sharing services like Uber, Lyft and SideCar were supposed to make the process of hailing a cab easier, faster and more transparent – in spite of the objections of regulators and existing taxi and limousine operators.  But in China, they may be making it harder (for some) and more expensive (for all).

In the U.S., Uber, Lyft and SideCar are battling their way into the market city by city and airport by airport with varying results (Ridesharing Makes Friends in Some Jurisdictions, Enemies in Others - http://tinyurl.com/luhfs5e).  In Europe, Brussels, Paris and Berlin have put roadblocks in the path of these offerings to preserve local taxi driver hegemony.

But in China, taxis are welcoming these services as they are helping to boost fares, although at the expense of the linguistically, technologically or chronologically challenged.  Two dominant app-based services have emerged in China, Kuaidi and Didi, thanks to a money burning competitive struggle between Tencent and Alibaba which has contributed to the early exit and failure of 40 competing companies.

Didi is supported in part by Tencent (known for popular QQ and Wechat services) and a total of 100M RMB in venture capital and Kuaidi (with major investor Alibaba) has a similar amount of support.  While fighting for shares of the taxi ride market - and paying drivers to participate - they are also vying for control of the mobile payments market.

At the very beginning, the maximum subsidy a taxi driver can get for a single deal is 100RMB, typically the taxi driver can get 10-20RMB for one order and the passenger can get 10RMB for one trip.  Now if the passenger use Didi and pays with Wechat, he or she can still get 3RMB and the taxi driver can get 5RMB.

In the end, the battle is ultimately between Wechat and Alipay with taxis and their customers caught in between.

In China, taxi drivers and their customers have rapidly adopted these applications.  So, rather than private citizens getting into the taxi driving business, taxi drivers are using the apps to find customers.  It is worth noting that in some U.S. metropolitan areas, such as Washington, DC, cab drivers have either fought the ridesharing services, quit driving taxis in order to dive entirely into the ridesharing business, or have chosen to split their time between driving a taxi and privately offering rideshares.  And some cab drivers have taken to using apps to find fares in the U.S. and elsewhere.

At the same time, some municipalities, such as New York City, have tried to limit the use of apps to hail cabs – something Paris is also attempting to do.  In Beijing, taxi drivers are supposed to only use one of the hailing applications.

But in China, taxi drivers have adopted the apps to find customers and now customers seek out taxi rides by bidding - offering commissions - for their rides.  In effect, cab drivers, many of whom are using both Kuaidi and Didi simultaneously, are using these apps to bid up the cost of rides.

This is great news for cab drivers considering that taxis are notoriously inexpensive in China - $30 for an hour-long ride to the airport.  But this is a mixed blessing for taxi customers.  A colleague and a friend acknowledged during a recent visit to Asia that using the new apps is essentially the only way to catch a cab for which it is assured that a premium fare will be paid.

The services practically guarantee a pick up from anywhere to anywhere, but they also practically guarantee that the passenger will pay a premium. In fact, the apps guarantee that the customer will have to bid for a ride – escalating the amount of the commission in 5RMB increments until a taxi agrees to the fee and the pickup.

Considering that it is often difficult to get a cab ride in some areas of some cities, the availability of the app is a very good thing.  The bad news is that the use of an app on a smartphone in the local language means hailing cabs in China has just been made more difficult for any potential customer that either lacks a smartphone or cannot read or write Mandarin – which means the poor, elderly and tourists will have a rough go of it.

It also means cab drivers may be more selective about when they work, focusing their driving around high opportunity hours when they are most likely to obtain high fares.

The problem is being attacked at the city level in China, not unlike the way it is being combatted outside the country.  Of course, since it is China, it means every new local rule or restriction brings with it differing degrees of cooperation from the cab drivers.

The net result is that cab drivers will start making a better living in China and foreigners will become more dependent than ever on hotel concierges and local acquaintances to arrange cab rides.  Chinese consumers – young and old – that use cabs and lack a smartphone will be compelled to get one.  And the first taxi app developer to offer an English language version will gain a significant competitive advantage.

It is an interesting trial run for a very specific taxi hailing app model and one that favors actual cab drivers over ridesharing amateurs.  Hopefully the unintended negative consequences will not prove fatal to the broader acceptance of the concept.


May 4, 2014 16:00 rlanctot

This is like one of those chocolate/wine/marijuana (pick one) is good for you stories. It contradicts everything your mother ever told you - but that your dad told you was true.

A senior executive for a usage-based insurance company approached me recently with a quandary. He said his customer data showed that driving behavior improves with mobile phone use. This executive wanted to know if I had seen anything similar elsewhere and he was very hesitant about sharing what he regarded as highly controversial information.

The executive talked about this information as if he were Edward Snowden in possession of NSA secrets and in need of diplomatic immunity and a safe haven. This is no surprise, as the hysteria surrounding distracted driving has led to an almost universal condemnation of the use of mobile phones in cars, even in a hands-free fashion.

The irony to this executive’s finding is the fact that properly conducted research into the use of mobile phones during driving has shown driving behavior impacts to be virtually indistinguishable from driving without a mobile phone. In the words of a well-known study co-authored by my colleague, Chris Schreiner, during his time working in human factors at OnStar:

“We conclude that for personal conversations using a hands-free embedded device, the risk of an airbag crash is somewhere in a range from a moderately lower risk to a risk near that of driving without a recent personal conversation.”

  • Real-World Personal Conversations Using a Hands-Free Embedded Wireless Device While Driving: Effect on Airbag-Deployment Crash Rates – Young & Schreiner (2009)

OnStar’s use of personal minutes – wireless hands-free phone calls made via the embedded OnStar module – was the earliest form of hands-free calling. The results of this study – derived from an analysis of 91M hands-free calls from an average of more than 300K drivers per month over a 30 month period and representing 276M driver-minutes – have been borne out by studies such as the Virginia Tech Transport Institute naturalistic driving study and others.

Dozens of contradictory studies, using non-naturalistic methodologies, have fueled the anti-smartphone, driver distraction debate – as have statistics attributing thousands of highway fatalities to the use of smartphones. At issue is the claim that hands-free calling is as distracting as handheld calling. At stake is allowing consumers to use their mobile phones in moving vehicles.

Opponents of any mobile phone use in cars, a large and strident constituency with the ear of regulators, want to see hands-free phone use conflated with handheld use because handheld use has a significantly higher distraction factor. These groups rely on the findings of studies that almost universally focus on workload management analysis requiring un-natural tasks being performed during driving on the road or in a simulator.

These groups also trumpet claims of fatalities attributable to mobile phone use in the range of 1,000-3,000 in the U.S. and many thousands more around the world. Of course, it is difficult to know what kind of mobile phone use is implicated in each of these fatalities, but the numbers alone are enough to impel a call for a smartphone ban in cars.

The U.S. is pushing for individual states to enact laws requiring hands-free technology when making phone calls from mobile phones in cars. This is in line with regulatory activities in Europe and Asia, though enforcement varies widely.

It does make sense to ban the touching of mobile phones while driving – as most European countries have done – but there are those that will not stop until all mobile phone use in the car is restricted, banned or jammed. This would be a mistake, as multiple studies have shown.

The latest steps in the U.S. include the second round of VTTI’s study and mobile device UI guidelines from the US DOT. We won’t have the results of the second VTTI naturalistic study probably until the beginning of 2015. And the US Department of Transportation’s National Highway Traffic Safety Administration guidelines for the use of mobile devices in cars is not expected until the end of 2014.

Researchers do agree that texting and driving is distracting and ought to be banned. But hands-free calling may actually have a prophylactic effect. That is the controversial indication in the data – drivers have fewer accidents when talking on their mobile phones.

This is not to say that mobile phone use while driving is something to be encouraged. It is suggesting, though, that drivers are either deciding on their own to make calls primarily when it is safer to do so, or they are compensating with a higher state of vigilance when talking on the phone.

It is worth noting, in the words of one researcher, “When the driving demands are low, it is actually very difficult to devote all of our attention to the driving task.” In other words, a hands-free phone conversation could be acting as a stimulus to an otherwise inattentive driver helping to keep him or her awake and engaged in the otherwise boring driving task.

What precisely is causing drivers using mobile phones to demonstrate improved driving behavior relative to those not using their mobile phones remains unclear. One thing that is clear is that it is a controversial subject likely to continue to fuel debate and study. The important thing is that we continue to regard this as a debate and not a forgone conclusion as some in the driver distraction community would have it.

Maybe it is time to look at how many lives have been saved by smartphones in cars or how many might be saved with smartphones properly configured to alert the driver to contextual cues. Thankfully companies like TeleNav, HERE, INRIX, TomTom, Garmin, and Global Mobile Alert are all working on delivering those smartphone applications.


April 4, 2014 22:16 rlanctot
I am chairing the Telematics Update Content & Apps event in Munich on Tuesday and Wednesday, April 8th & 9th, next week  (http://tinyurl.com/6msselt).  The event looks at the opportunity to bring apps into cars and to enable remote control of cars via smartphones.  But with opportunity comes risk. 
A report from a blogger (http://tinyurl.com/pdrr8z6) highlights the minimal level of security provided for the Tesla iPhone app which allows remote locking and unlocking of the Tesla Model S.  There is no excuse for a company of Tesla's sophistication to leave such an inviting vulnerability in place.
The following commentary was written by Mayukh Gon, CEO and founder of PerfectCloud, a company that provides co-called identity-as-a-service, single sign on and data encryption for businesses.  I am sharing his thoughts as a courtesy in advance of the Content and Apps event:
Dear Tesla: Security is Not a Retrofit
The bedrock of a good life is security. From infancy through school, at work, at home, in our vehicles, in our online activities – we all want both physical and virtual security.
It was revealed last week that venerable automaker Tesla (you know, the one that designed and manufactured the $59,000 - $100,000+ electric Model S) had less-than-optimal security around the iOS app that lets Model S owners unlock their cars. The problem was an easily cracked password system that allowed persistent hackers to both find and unlock the high-end cars.
If the luxury Tesla has weak password protocols, what might that say about what’s in place in the less exotic vehicles driven by the rest of us?  What might that mean for drivers?
The Tesla mishap is a microcosm of much larger technology security concerns. 
As the auto industry moves closer to autonomous vehicles in the next several years, the security of the multiple systems needed for driverless vehicles should be an imperative. If someone hacks into a vehicle’s systems – more than just the lock system like in the Tesla -- what might the results be? Could a hacker remotely disable the vehicle? Could someone with ill intent cause a car’s airbags to deploy while the vehicle is operating on the highway? 
These types of security concerns are certainly not unique to automakers. Our lives are increasingly touched by automation and connectivity in our homes, at work -- everywhere. Security must be the bedrock rather than an afterthought.  Technologies exist today that remove the vulnerabilities by eliminating single points of failure.
Let’s not be those people who install alarm systems after being burglarized. That’s security as a retrofit, and it’s simply not practical in our increasingly connected world. 

April 4, 2014 14:50 rlanctot

The European Union has voted to end wireless roaming a move that is guaranteed to deliver a severe jolt of revenue growth for wireless carriers and ease the minds of car companies implementing telematics.  The plan, subject to review and set to take effect by Christmas 2015, will fundamentally change consumers’ relationships to their wireless carriers in a positive manner.

(According to the EU:  Member States will review the regulation and the Commission expects final agreement by the end of 2014.  The “Connected Continent” telecoms Regulation was proposed by the Commission in September 2013.  It aims to … end roaming charges and guarantee an open Internet by banning blocking and degrading of content, coordinating spectrum licensing for wireless broadband, giving Internet and broadband customers more transparency in their contracts, and making it easier for customers to switch providers.)

Once the decision, if upheld, takes effect it will cause consumers to no longer treat their phones like kryptonite when traveling across or near borders.  Usage of mobile phones and mobile Internet will blossom with the passing of the fear factor.

The decision will also wipe away many of the negative connotations associated with carriers.  One need look no further than the words of Neelie Kroes, European Commission vice president, in announcing the move:

“This vote is the EU delivering for citizens.  This is taking the opportunity to get rid of barriers to make life easier and less expensive.  Nearly all of us depend on wireless and Internet connections as part of our daily lives.  We should know what we are buying.  We should not be ripped off.  And we should have the opportunity to change our mind.  Companies should have the chance to serve all of us.  And this regulation makes it easier for them to do that.  It is win-win.  This vote puts us one step away from liberating one billion devices and every European.  With your support we are going to win this battle.”

These are certainly election year sentiments from the EU (with a tinge of Cold War imagery), but Kroes is correct to decry the consumer perception/experience of being “ripped off,” in her words.  And the “change our mind” comment suggests more changes in EU wireless regulations to come, perhaps along the lines of The Netherlands’ “blank SIM” legislation (CNET story: http://tinyurl.com/mrkdesx).

Just as iTunes expanded the market for audio content, rather than undermining it, the liberation of carriers and consumers from roaming charges will present a massive stimulus to the use of wireless networks – including telematics.  Tourists and natives alike will welcome and benefit from the change which will also stimulate the wider economy and likely give rise to new business opportunities.  Who knows, maybe the turnout for the upcoming EU election will get a boost as well.


April 2, 2014 11:46 rlanctot

Against the depressing tableau of General Motors and National Highway Traffic Safety Administration testimony before a U.S. House of Representatives sub-committee yesterday over the recent ignition switch recall two inspiring developments impacting vehicle design emerged. GM CEO Mary Barra noted to the panel GM’s consideration of bringing keyless, push-button start technology across its entire line up, and the Alliance of Automobile Manufacturers separately petitioned NHTSA to relax its requirement for a driver side and rearview mirrors.

The proliferation of push-button start technology will obviously remove the electro-mechanical causal element behind the ignition switch failure in question. If there is a single positive element that can emerge from the entire recall debacle this may be it.No mechanical switch, means no ignition switch failure – at least not a mechanical one.

The AAM request for NHTSA to relax Federal Motor Vehicle Safety Standard #111 is intended to enable car makers to replace the driver-side rearview mirror and the internal rearview mirror with camera-based systems. The AAM request coincided with NHTSA’s last-minute decision (in the face of pending legal action) to announce the implementation plan for the rear-visibility mandate.

AAM’s statement: http://www.autoalliance.org/index.cfm?objectid=BE3624F0-B8F3-11E3-AB0B000C296BA163

Removing the driver-side mirror has been suggested by the design of Volkswagen’s XL1 plug-in diesel hybrid which has opted for cameras over mirrors to reduce drag and weight. Tesla, too, with the Model X, has been pushing for this change and joined the AAM's petition. Neither the XL1 nor the Model X will be street legal in the U.S. under current regulations.

At the Geneva Motor Show in March, Nissan demonstrated a camera-based rearview mirror system turning the in-cabin rearview mirror into a display with a panoramic view to the rear of the car. The GM Authority newsletter has reported that GM “is in the process of securing a trademark for the word ‘THRUVIEW.’”

According to GM Authority, the automaker filed an application with the United States Patent and Trademark Office on Jan. 24, 2014 for a “motor vehicle rear view mirror that can also function as a display monitor to provide a panoramic rear view.”

On a less heartening note, yesterday’s hearing laid bare GM’s failure to resolve the ignition switch problem in a timely manner while NHTSA’s representative, David Friedman, blamed GM for failing to notify the agency of the problem. Consumer advocacy groups found fault with both GM and NHTSA. Both Barra and Friedman are freshman leaders of their respective organizations contributing to the inchoate feeling to the entire proceedings.

During the hearing members of Congress highlighted inconsistent communication between GM and its dealers and between dealers and consumers.  This is another challenge for Barra and GM to resolve.  In the midst of Tesla's challenge to the dealer model of selling cars, GM finds itself more dependent on dealers than it has ever been.  Perhaps this will lead to a re-evaluation of these relationships.

GM CEO Barra repeatedly referred in her testimony to the “new GM” emerging with her appointment and how the old cost-based culture – under which safety concerns were mitigated by cost issues - had been banished. Let’s hope NHTSA sees its own rebirth as a watch dog instead of a lap dog.


March 28, 2014 01:05 rlanctot

Volvo is commencing a test of existing wireless networks to communicate road conditions.  The brilliance of Volvo's strategy lies in its simplicity - using existing on-board vehicle connections to enhance safety for all drivers - and in the process stealing a march on the V2V community, determined as it is to have a dedicated module using dedicated spectrum to perform such tasks.

This analyst has long sought inclusion of LTE technology and smartphones in V2V tests to contrast and compare the performance of wireless network technology against purpose-built devices.  Volvo Car Group (Volvo Cars), the Swedish Transport Administration (Trafikverket) and the Norwegian Public Roads Administration (Statens Vegvesen) are joining forces in the pilot project in which road friction information from individual cars will be  shared within a cloud-based system.

The parties to the test envision real-time data about slippery patches on the road being shared with other drivers and road authorities with the intent of enhancing safety.  Of course, with the proliferation of on-board cameras and embedded wireless connections, the potential to extend the pilot to hyper-local weather analysis, wet road surface reporting and other related applications are glaringly obvious.

According to contacts at the U.S. Department of Transportation, as much as 70% of road accidents occur when roads are wet. One of the greatest challenges in managing traffic is the acquisition of hyper-local data.  There is no doubt that Volvo executives are aware that they are on to something - that tracking slick roads is only the beginning.

On-board cameras tied to historical traffic data could be triggered to transmit images to off-board services at any time real-time driving conditions are out of sync with historical expectations - jams when there should be free flow or free flow when there should be a jam.  Multiple organizations are seeking to tap into fleet resources and fixed traffic cameras to get more accurate assessments of hyper-local traffic.

Rather than wait for some pie-in-the-sky V2V mandate, Volvo is taking the challenge of enhancing road safety to the crowd and the cloud leveraging on-board connections to communicate conditions to other drivers and traffic authorities.  The brilliance of this plan will no doubt be widely embraced across the industry - perhaps even for connected smartphones in cars.  We look forward to the results of the pilot.


March 25, 2014 12:00 rlanctot

The auto industry, insurance industry and Northern California’s AAA organization saw a collision of their interests over a bill, SB 994, proposed in the California legislature to put control of vehicle data in the hands of consumers. The broad outlines of the bill, crafted by the Northern California branch of AAA, which offers auto insurance services to its members, includes the following consumer protections (in the words of the bill’s sponsors):

Disclosure: Ensure consumers are informed and understand what information is being collected and what is transmitted to the automaker.

Access: Ensure consumers have access to their car information and prohibit automakers from creating exclusive systems.

Choice: Ensure consumers have the right to control who can access their car information and designate other service providers to receive their information to provide needed and wanted services.

More details: http://calstate.aaa.com/about-aaa/press-room/legislation-announced-to-provide-consumers-rights-to-control-their-own-car-data

The importance of the legislation derives from California’s outsize impact on the global automotive industry which originated with the influence of California’s Air Resources Board (CARB) on vehicle emissions standards around the world and is directly related to the size of the California new car market.  Automobile regulations enacted by California’s legislature have global impacts and for that reason attention is being paid and negative reaction from the automotive industry was swift.

Reaction: http://blogs.sacbee.com/capitolalertlatest/2014/03/control-of-car-data-at-stake-in-bill-monning-bill.html

While California and the SB994 sponsor AAA of Northern California have identified a problem – the preservation of the driver’s privacy and access and control of their vehicle data – the initiative flies in the face of competing Federal regulatory activity intended to connect all vehicles to one another in the interest of safety.  Further, the preservation of driver privacy has been rendered ambiguous by the integration of mobile phones capable of tapping into on-board vehicle data.

Car makers have just begun to create smartphone apps and customer portals allowing consumers to access their vehicle data.  These efforts, which are intended to raise consumer awareness of their vehicle data in the interest of improving vehicle care and driving behavior, may well be nipped in the bud if disclosure requirements create a data-sharing boogeyman.

 

In some respects, AAA Northern California should be seeking the reverse of a privacy initiative.  Wouldn't it make more sense to require car companies to take responsibility for collecting vehicle data in the interest of preserving driver safety in the event of a potential system failure?  AAA seems to have gotten itself tangled up in the wrong side of this argument - fighting against the interests of its own members.

The irony is that California already limits the kind of data auto insurers can use for usage-based insurance programs, such as those offered by AAA, raising questions about why AAA Northern California would “wave the bloody shirt” of vehicle data privacy in the first place.  This is a problem already in the process of being solved by the industry and legislation of this kind is redundant, misleading and self-defeating for those parties interested in improving driving safety.  And no doubt existing privacy disclosure requirements ought to be sufficient. 

One possible exception is the access to vehicle data by independent car repair shops.  The auto industry and the independent repair industry are locked in a battle over the so-called “right to repair,” but this issue, too, seems to have already been resolved by previous legislation - in California no less


March 22, 2014 17:34 rlanctot

A report in Automotive News this week noted the extraordinary lengths to which General Motors (GM) is going to prepare and support dealers taking on the recently announced 1.6M vehicle recall.  The effort includes an outreach to multiple rental car organizations, ramped up replacement part production, $500 new car discounts and extended insurance coverage.

But is it enough – and are there larger lessons for the industry as a whole to learn?

GM’s new CEO, Mary Barra, has stepped forward to accept the challenge to turn this apparent corporate baptism by fire into a turning point for the company – embracing responsibility for the ignition switch flaw.  Barra’s move is reminiscent of her comment to the Fortune Magazine “Most Powerful Women Summit” last October prior to her appointment as CEO: “No more crappy cars.”

Maybe crappy cars aren’t the problem – maybe its crappy customer relationships that are at the heart of the matter.  It is worth noting that GM’s recall occurs against the backdrop of  Tesla’s failed attempt to maintain its existing retail presence in New Jersey (tinyurl.com/jwa5n3x  - New Jersey's Tesla Smackdown Is Fair, but Dumb) in the face of legislative opposition fueled by franchise dealer angst and lobbying muscle.

For all her good intentions, Barra begins her GM tenure with a charge of $300M to the first quarter earnings report to cover the cost of the recall.  And the value of having a large franchise dealer network to handle the necessary work and customer interactions could not be more obvious.

The larger issue, though, is that there is clearly a price to pay for failing to anticipate or respond to vehicle problems as early as possible.  Toyota learned this to the tune of $1.2B last week.  And Volkswagen, in China, felt a $480M bite last year from a 384,000-vehicle recall in that country.

The difference between GM and its two largest competitors is the presence of the OnStar system, which is now factory fit in nearly every GM vehicle (in the U.S.).  With cars lasting, on average, more than 11 years, the presence of the on-board telecommunications module ought to represent a huge competitive advantage for connecting with customers and connecting customers with their dealers.

Factor in the need to reach out to original as well as second and third owners to notify them of potentially life threatening recall-related repairs to their cars and the purpose and value of that on-board connection changes considerably.  GM has been operating OnStar for 17 years and yet, in that entire period of time, has never seen fit to make available to the customer a free level of service that would provide for vehicle diagnostics and safety communications TO the vehicle over an extended period of time.

But GM is not alone.  Few car makers offer any kind of extended free period of vehicle connectivity. 

BMW announced a move to 10 years of free service in the U.S. last year.  (Back in Germany, BMW only offers three years of free service.)  The 10 years of free service in the U.S. not only includes the automatic crash notification function, but also scheduled and condition-based maintenance notifications and service scheduling from the car.  Hyundai, too, has opted for three years of free service.

All of this comes to my mind as I look at two recent recall letters I received for my wife’s Toyota Sienna.  Both of these documents note that if the repairs related to the recalls have already been made, my wife and I will have to produce a range of relevant documents in order to be reimbursed.

This is the real reason for this blog.  With cars lasting more than 11 years, car makers need to change the way they engage with their customers.  The purchase of a car is usually the beginning of a long-term relationship or, if not, it is the beginning of a long voyage for the vehicle.

A vehicle with a built-in telecom module has the power to preserve a connection between the car maker and the dealer and the vehicle (if not the original customer) for a decade or more.  And in the event of vehicle recalls, there is a powerful safety-related reason to maintain that connection.

Regarding the reimbursement documentation, if a related repair has been performed on the vehicle there ought to be a record stored somewhere accessible to the customer and the dealer to verify the work was performed.  Requiring the customer to prove the repair was done, obviating the need for the recall work, is annoying to say the least and brand alienating for sure.

Every car maker needs to rethink its telematics strategy to better connect with customers over the long term and to make better use of diagnostics systems.  The value of the customer connection is obviously in the hundreds of millions of dollars. 

And keeping customers devoted to your brand is important as well.  We now know – thanks to GM’s head of global quality and customer experience Alicia Boler-Davis – that a percentage point of improved customer retention is worth $700M. (http://tinyurl.com/lzc634c)

Customers are entitled to portals and apps where vehicle data and history can be accessed.  Car makers should not be forcing consumers to turn to third-parties such as Carfax to discover (the sometimes partial and inaccurate) history of their vehicle.

Built-in connectivity can be used to communicate with original and second and third owners of the car.  Not unlike Sirius XM, OnStar and other telematics services should be transferrable and a free basic level of service provided for – at the very least to communicate safety-related recall information in a timely manner.

It’s still not too late for GM to seize this opportunity to transform its customer relationships in a more positive direction and leverage the extraordinary advantage manifest in the OnStar service.  And for the industry, the arrival of vehicle connectivity is an opportunity to eliminate crappy customer service for good.


March 21, 2014 03:09 rlanctot

Volkswagen Chairman Prof. Dr. Martin Winterkorn used the made-up term “Datenkrake” when speaking at CeBIT last week to caution the converging computer and automotive industries against turning the car into a data monster (Datenkrake) capable of abusing consumer privacy rights. I wrote a blog on the subject earlier this week ( tinyurl.com/k59yz8v - Ich Bin ein Connectedcar - VW's #Winterkorn warns against the connected car as a #Datenkrake) suggesting that it was unwise for Winterkorn to use this characterization.

With the $1.2B Toyota settlement with the U.S. Justice Department now concluded and GM’s 1.6M-car recall to fix a faulty ignition switch underway, it is important to emphasize that an obsession with privacy cuts two ways – neither of which serves the interest of the consumer.  Car companies overly focused on privacy are failing to serve their own or their customers’ interests.  Car companies suggesting otherwise are deceiving themselves or their customers or both.

After the settlement with the U.S. Justice Department, Akio Toyoda, described the experience as a turning point for the company – a chance to re-focus on the customer. The Automotive News quoted Toyoda as saying: “Recalls are not about concealing problems we find. It’s about improving the product and coming up with countermeasures,” Toyoda said. “It’s a good thing from the long-term perspective of the automotive industry’s sustainable development.”

I am going to take Toyoda’s comments – and the new openness expressed by GM’s CEO Mary Barra in the wake of that company’s recent recall – a step further to suggest that what is called for is greater transparency. Car makers overly concerned with customer privacy may find themselves cut off from access to vehicle data that is vital to enhancing existing and future cars and saving lives. Conversely, consumers who opt for more closed, unconnected and privacy-enhanced vehicles may cut themselves off from access to vital information about their own cars – while granting the car maker plausible deniability. Of course, plausible deniability ("We had no idea there was a problem.") is a thin figleaf for a car maker when fatalities are involved.

Privacy concerns must be addressed by each car maker to the satisfaction of customers. Transparency ought to be every company’s guide.

A final note: What is not needed is some sort of industry coalition or consortium. There is nothing that looks less friendly to consumers than car companies all agreeing on a singular approach. This effort not only wastes time, but virtually guarantees the least innovative solution possible. Positive change can only come from competitive efforts to resolve this issue.

The best thing Winterkorn could now do would be to write a letter to the European Commission asking that organization to mind its own business when it comes to privacy policies governing the automotive industry. After fouling up the more than decade long effort to legislate eCall, there is no telling what kind of a mess the European Commission will make of privacy.


March 19, 2014 21:37 rlanctot

In what may have been the first CeBIT keynote by an automotive executive but hopefully not the last, Volkswagen’s Chairman of the Board of Management Prof. Dr. Martin Winterkorn spoke last week of the merger of the automobile and the computer industry and raised the specter of the connected car becoming a “Datenkrake.” A literal translation is “data octopus” though VW communications rendered it as “data monster.”

The comment speaks to Volkswagen’s and the industry’s ongoing ambivalence toward vehicle connectivity and the inability to articulate the positive aspects of connectivity without highlighting the potential downside. Winterkorn pointed to the need to protect customers from abuse of their data:

“The car must not become a data monster,” he said. “We already protect our customers against a wide variety of risks such as aquaplaning, micro-sleep and long, time-consuming congestion. With the same attention to our responsibilities, we intend to protect our customers against the abuse of their data.

“I clearly say yes to Big Data, yes to greater security and convenience, but no to paternalism and Big Brother. At this point, the entire industry is called upon. We need a voluntary commitment by the automobile industry. The Volkswagen Group is ready to play its part.”

The first-time automotive keynote was part of a CeBIT presented under the made-up concept of “datability” with its obvious reference to Big Data. Winterkorn spoke positively of the broad societal benefits to be derived from vehicle connectivity but his Datenkrake comment hit a sour chord for international visitors though it may have resonated positively with the local German audience.

The comment highlighted two critical issues facing the auto industry generally and the German auto industry in particular. The first issue is the need for the automotive industry to embrace vehicle connectivity of all types. In this context, referring to vehicle connectivity as "Big Brother," "Datenkrake" or "paternalistic" represents precisely the wrong message – even in the context of conveying things to be avoided.

The automotive industry globally is clearly on a path to universal vehicle connectivity in a variety of flavors – via embedded modems, connected smartphones, V2X technology, and satellites - so it is best to treat it as a given and a positive rather than something to be feared or dreaded. For the German auto industry in particular, though, any negative impressions of vehicle connectivity must be overcome and dark references avoided.

Winterkorn managed to avoid Ford’s Jim Farley’s CES gaff of asserting that Ford was already tracking its customers – a claim which was actually incorrect.  But to focus on the downside or even mention potential negative outcomes from vehicle connectivity is to miss the point of connectivity entirely.

Embedded connectivity is being aggressively pursued by governing bodies such as the European Union and even the United Nations.  (The United Nations Economic Commission for Europe has been pursuing a global eCall initiative for the past year.)  Governments want cars connected for the benefit of the driver – to ensure the notification of emergency responders in the event of an accident as well as, ultimately, to entirely avoid collisions.

EV maker Tesla has shown, in the U.S., that a car’s safety can be enhanced by an over-the-air software update.  With the growing amount of software in cars and the rising tide of recent vehicle recalls, there is no doubt that over-the-air software updates are rapidly becoming a required capability on new cars.

With Toyota’s just-announced $1.2B settlement with the U.S. Justice Department over unintended acceleration and GM’s 1.6M vehicle recall now under scrutiny, the importance of vehicle connectivity for anticipating and/or remotely diagnosing vehicle failures has been elevated as a consumer value proposition. In such circumstances connectivity and data communication is the customer’s friend … not a monster. Is it paternalistic to notify a driver – via conditioned-based maintenance applications - that his or her brakes are in danger of failing?

It is time to put the Datenkrake back in the closet and embrace the warm cuddly customer relationship altering power of vehicle connectivity. Are there security concerns? Yes. And they must be addressed. Policies must be defined and published for what data is extracted; how it is secured, managed and shared; for how long; and with the customer’s consent, access and control.

Privacy, too, must be factored in and liability better defined – especially in a world increasingly populated with semi-autonomous cars. But the need for privacy must be balanced by the right of the State to access data that may reveal the circumstances contributing to vehicle collisions with people, property and other vehicles.

The right to privacy ends where harm has been or might be done to another. In this way the privacy governing the use of cars is different from the privacy conferred on the user of a mobile phone or desktop computer. Consumers may not want their poor driving behavior used against them by car insurers, much as consumers with pre-existing medical conditions don't want an unfortunate medial history used against them by health or life insurers.  But those concerns fall away when determining liability.

The actual challenge for Volkswagen and all car makers is to create connected car value propositions that are sufficiently, no, overwhelmingly attractive so that opting out is never considered. In fact, Volkswagen would do well to take a page from BMW’s strategy in North America and build a free layer of connected services into every car to ensure safe driving, up to date on-board software, and remote diagnostics for condition-based maintenance - at least!  (In fact, Qoros Auto, the newest car maker in the garage, is offering lifetime connectivity on its new hatchback, launched at the Geneva Auto Show.)